Worried over IIP nos, India Inc seeks rate cut by RBI

Tags: News
Expressing serious concern over contraction in industrial output in November, India Inc called for immediate policy interventions, including a rate cut by RBI, to prevent job losses and boost demand.

"The red marks on IIP are a matter of serious concern underscoring the need for immediate policy intervention by the RBI and the government. The RBI should cut interest rates while the government should take steps to boost demand in the public sector," Assocham President Rana Kapoor said.

"Our worry is that if the situation is not immediately arrested and reversed, there could be a severe impact on employment. A sharp reduction in demand would force companies to prune headcount to remain afloat," Kapoor said.

Terming the contraction in IIP as "extremely worrisome", CII Director General Chandrajit Banerjee said: "Much more needs to be done to revive investment. The government should ensure that projects getting cleared by the Cabinet Committee on Investment (CCI) are implemented on the ground."

"Government policies should be complemented with a shift towards an accommodative policy announcement by the RBI in its forthcoming monetary policy to revive investment and propel demand," he added.

RBI is scheduled to unveil the third quarter review of monetary policy on January 28.

PHD Chamber of Commerce President Sharad Jaipuria called the IIP contraction as "disappointing". "The most worrying factor is significant slowdown in the manufacturing sector. The signs of slowdown in the consumer goods segment are also appearing," he said.

Dashing hopes of recovery, industrial production contracted by 2.1 per cent in November, the lowest in six months, mainly due to poor performance of manufacturing sector and lower output of consumer goods particularly white goods.

The manufacturing sector, which constitutes over 75 per cent of the index, declined by 3.5 per cent in November as against a contraction of 0.8 per cent a year ago.

Overall, the consumer goods output declined by 8.7 per cent in November compared to a contraction of 0.3 per cent in the same month in 2012.

In terms of industries, 10 of 22 industry groups in the manufacturing sector have shown negative growth in November.

Post new comment

E-mail ID will not be published
CAPTCHA
This question is for testing whether you are a human visitor and to prevent automated spam submissions.

EDITORIAL OF THE DAY

  • Need to rein in profligate promoters in low margin airline business

    With the media and industry searchlight trained hard on SpiceJet, it is easy to forget that it may be, at worst, a symptom, not the real malaise itsel

FC NEWSLETTER

Stay informed on our latest news!

INTERVIEWS

GV Nageswara Rao

MD & CEO, IDBI Federal Life

Timothy Moe

Goldman Sachs

Chander Mohan Sethi

CMD, Reckitt Benckiser India

COLUMNIST

Urs Schöttli

Shifting sands in the Far East

As was to be expected, Japanese prime minister Shinzo Abe ...

Zehra Naqvi

When humanity died, bestiality prevailed

The terrorist attack that killed 132 children in Peshawar has ...

Bubbles Sabharwal

Why self-esteem must be your best friend forever

Two negatives do make a positive! Imagine no doubts, no ...

INTERVIEWS

William D. Green

Chairman & CEO, Accenture